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Another phase of the recovery from the historic spring flood has started – the race to repair and rebuild the levee system that was strained by the high water, and the political process to pay for it.

Relentless spring rainfall in the Lower Mississippi Valley combined with annual snow melt in the upper Midwest filled the Mississippi River with more water than it had seen since floods of 1927 and 1937.

The result was disastrous: Millions of acres of crops from Missouri to New Orleans ruined, homes and businesses destroyed and a levee system that in spots is in need of major repair.

Save the Delta, a grassroots campaign started while the water was still high, is an organization working on behalf of the Memphis-based Mississippi Valley Flood Control Association to push Congress for funding to completely rebuild or otherwise repair the mainline river levee system and the backwater levees in the Lower Mississippi Valley. The Lower Mississippi Valley stretches from Southeast Missouri to New Orleans.

Congress has already appropriated some money for levee repair. On Sept. 7, $4.86 billion was allocated for U.S. Army Corps of Engineers water projects. It included $1.3 billion for work on the Mississippi River and Tributaries Project, a government flood control program launched in 1928.

Save the Delta has a goal of $3 billion to completely restore the levees of the Lower Mississippi Valley to pre-flood condition.

In Mississippi, the Vicksburg District of the Corps of Engineers has just started letting contracts to repair its part of the mainline and backwater levee systems.

Kavanaugh Breazeale, District spokesperson, said last week a $3.1 million contract was awarded recently to fix two seepage areas near Eagle Lake, an area between Vicksburg and Yazoo City that was among the hardest hit by the flood.

Breazeale said the Corps was still evaluating levee systems up and down the river in Mississippi and elsewhere to see exactly how much damage was done, and compiling a list of areas that should be prioritized for repair before next spring’s flood season.

“It’s an ongoing process,” Breazeale said. “Experts are out there now still trying to find out what needs to be done, what can wait and what can’t. There’s still an ongoing assessment and that goes for Vicksburg as well as the whole division from Canada to New Orleans and everywhere in between. There is no number (for a total price tag) yet, but it’s still growing.”

During a Senate subcommittee hearing in July, Sen. Thad Cochran said the mainline levee system, which runs along the Mississippi River, did its job, preventing floodwaters from reaching people and property on the non-river side. Most of the serious flooding, he said, was along the backwater levees that abut the smaller rivers and streams that make up the Mississippi’s spider web of tributaries.

“The situation prompts me to question whether or not we need to go back to the drawing board to see what could be done to protect more people from this kind of disaster,” Cochran said.

Mississippi Emergency Management Agency director Mike Womack said in that same hearing that a lot of existing backwater flood-control infrastructure “was not enough to protect the citizens.”

Womack singled out the Yazoo River Basin, in the South Delta, as an example of an area whose flood-control infrastructure was exposed as inadequate. Water overtopped the Basin’s levee in several spots.

Cochran spokesperson Chris Gallegos said in an email to the Mississippi Business Journal that it was likely Congress would approve some form of additional disaster relief funding for the Corps of Engineers, perhaps as early as this week. It could come in the form of a stand-alone bill, he wrote, or as part of a continuing resolution designed to keep the federal government running after the Sept. 30 end of fiscal year 2011.

Jackson television station WLBT’s Bert Case may have stumbled upon a major scoop Thursday during the course of an on-camera interview with MDA interim executive director Leland Speed.

Case was asking about the eminent domain initiative that will appear on the November ballot when, apparently, Speed mentioned the possibility of South Korean automaker Hyundai building a plant in Mississippi that would produce its Sonata sedan.

I first got wind of this about 3 p.m. Friday, and I’ve been calling everybody I think might know something since.

Two folks who spoke on the condition of anonymity, and who would know if negotiations were getting serious, said the same thing: They don’t know anything, and my mention of it is the first they’ve heard of anything relating to Mississippi getting a third automotive manufacturing plant.

Speed declined further comment to Case after the slip, and there’s zero chance Gov. Haley Barbour’s office will do anything different.

If you’re a conspiracy theorist, you could reason that Speed intentionally floated the idea that Hyundai is looking at Mississippi as an example of the damage he says the restriction of the use of eminent domain for private enterprise would cause the state’s economic development efforts. I’m not saying that is or isn’t the case. I’m just saying that the few times I’ve talked with Speed about taking away the state’s power of eminent domain for economic development, he’s been vigorous in his assertion that it would take the state out of the running for mega projects like a Hyundai facility. This would be the perfect way to prove that point.

Hinds County Chancellor Denise Owens has ordered Trustmark National Bank to pour $1.75 million into a trust that she ruled it inappropriately invaded.

The ruling came after a trial earlier in the summer, in which Trustmark and former trust officer Joe Dick were accused by Meg Weidner of improperly disbursing $1.7 million to Dee Farrell, Meg’s mother, over a period of six years. Weidner claimed, and Owens agreed, that 150 disbursements from October 2002 to August 2008 to Farrell were improper.

In her ruling, issued Tuesday, Owens said Trustmark was “grossly derelict” in its management of the trust, specifically in its failure to follow documentation rules. As part of the ruling, Owens removed Trustmark as trustee and awarded Weidner $100,000 in punitive damages.

“Trustmark is a fine institution,” wrote Weidner’s attorney Mike Farrell (no relation to Dee), in an email to Magnolia Marketplace. “I think it will learn from these mistakes, correct them and be a better institution at the end of the day.”

I’ve asked Trustmark for a response, including if it has plans to appeal. When I get something, I’ll post it.

UPDATE: Statement from T. Harris Collier III, Trustmark general counsel: “We are in the process of reviewing Judge Owen’s ruling and considering all of our options. Trustmark believes that all of the distributions from the trust were consistent with the intent of the trust. The Court did not conclude that a single payment was improper under the terms of the trust. However, the Court determined that certain documentation policies and procedures were not followed by the former trust officer.”

An opinion issued last month by Attorney General Jim Hood reveals a discrepancy between state law and regulations set by the Federal Emergency Management Agency regarding the application of the Flood Mitigation Ordinance that is a big part of the National Flood Insurance Program.

Hood’s opinion, issued Aug. 17, says there is a provision in Mississippi law that allows for hunting and fishing camps to be exempt from flood mitigation ordinances adopted by individual counties. Those ordinances govern everything from the height of structures that sit in flood plains, to what type of flood insurance they’re required to carry.

Where the state’s exemption for hunting and fishing camps becomes a problem is with FEMA, whose regulations require that counties adopt the ordinances minus the exemption Hood says state law provides.

One of the provisions of the FMO says that the first floor of buildings in flood-prone areas have to be raised to a point above the base flood elevation.

“We have learned from certain counties in the Delta that FEMA is requiring the local governing authorities to enforce the (FMO) against all structures in the affected areas including hunting and fishing camps that are not flood-insured and whose owners do not wish to be insured,” Hood wrote in a letter to Mississippi’s congressional delegation. Hood is asking for congressional help to square the difference between state laws and FEMA regulations. Congress returned from its August recess Sept. 6.

“These camps are on the west side of the (Mississippi River) levee,” Hood’s letter read. “The local authorities have been told by persons from both MEMA and FEMA that if they exempt these hunting and fishing camps from the (FMO), the counties, and possibly the entire state, could be prohibited from participating in the NFIP. Under our interpretation of state law, however, counties and cities are in fact prohibited from enforcing building codes against duly qualified hunting and fishing camps.

“While we certainly do not wish to jeopardize our continued participation in NFIP, I see no valid rationale for requiring hunting and fishing camps near the river which are not flood-insured to comply with flood-related elevation and other requirements. It would seem that this matter could be resolved by FEMA allowing the counties to obtain sworn affidavits from these homeowners that they will not seek any federal insurance or aid without first meeting the requirements of the flood ordinance.”

Tom Ross, a Clarksdale attorney who represents the Coahoma County Board of Supervisors, asked Hood for the opinion. Ross said the discrepancy became an issue during and after last spring’s record-breaking Mississippi River flood. The floodwaters, which reached levels unseen since 1927, inundated the Mississippi Delta, destroying homes, farm land, wildlife sanctuaries, businesses, and ran up a damage tab in Mississippi alone that early estimates show will reach into the billions.

Ross said the conflict between Mississippi law and FEMA’s rules pertaining to hunting and fishing camps only added to the confusion.

“The law was not as clear as I would have liked,” Ross said in an interview with the Mississippi Business Journal. “It needs to be clarified. Cities and counties were kind of caught in the middle.”

Hood said in a press release issued by his office that if Congress fails to clarify the difference in state law and FEMA rules, he would at least consider turning to the court system for a remedy.

Until then, Ross said counties trying to make sense of which rules to follow will have to sit and wait.

“We’d be happy to offer any assistance we could, and we could certainly offer some real-world examples of how this is a problem, but the policy-making side of it would have to happen at the state level,” he said.

FEMA officials did not respond to request for comment by the time the MBJ went to press last week.

A real estate headache that has swamped high-foreclosure areas in the U.S. has surfaced in Greenville.

The Sovereign Citizens Movement, a group of people who don’t pay taxes and don’t recognize state or federal law or their court systems, has become a nightmare in areas like Atlanta, Florida and the West Coast where forecloses jumped and entire neighborhoods of empty houses were left unattended.

What happens is SCM members file bogus quit-claim deeds in local court systems – the same systems they claim not to recognize – and begin to homestead in empty houses. That’s exactly what’s happened in Greenville, said Realtor Betsy Alexander.

Alexander has been trying to sell a home on Bayou Road in Greenville since the owners moved out of state. She got word over the weekend that the previously empty home became occupied over the Labor Day holiday, and not by its rightful owners.

But the unwanted occupation, and all the fringe elements like animal waste and general filth that come along with it, aren’t the biggest problem.

“This is essentially paper terrorism,” Alexander said in an interview last week with the Mississippi Business Journal. “Let’s say I got an offer on the house today. The sale process could be held up for who knows how long because these people have filed a bogus deed, and unraveling that would be a nightmare. People think getting identity theft straightened out is bad. That’s nothing compared to this. Once you file a deed with a court, it’s extremely difficult to un-file it. And it affects people up and down the line, the insurance, the banks, the title, in this case the homeowners, and me, the Realtor. It’s awful.”

“What these people do generally is focus on foreclosed homes,” Alexander continued. “They don’t think banks should own houses so they file these fake quit claim deeds and just move in. They claim ownership of everything in the house – furniture, toiletries, everything. This is the first instance of this that I know of in Greenville.”

Alexander said the SCM members who took over her client’s home have been arrested, and had their initial court appearances last week. Each of the four members is charged with burglary and grand theft. As of Thursday afternoon, each remained in jail.

For the second time in a month, the Mississippi Supreme Court has called into question the constitutionality of a new law designed to streamline the appeals process for disputes arising from administrative decisions.

The court has asked for briefs related to a law the Legislature passed last session that provides for a direct appeal to the state’s high court in workers’ compensation cases. Old law mandated an appeal to a decision rendered by the Mississippi Workers Compensation Commission first go to a chancery court.

The Supreme Court has asked for briefs from Attorney General Jim Hood and Sysco Food Services and its insurance company, which are involved in the dispute. The briefs are due the second week of September. The Court entered a similar order in July asking for briefs related to the constitutionality of a new direct-appeal law for certificate of need decisions made by the Mississippi State Department of Health.

At that time, Mississippi College law professor Matt Steffey told the Mississippi Business Journal a law designed to remove one stop in the court process “quite unusual.” The Supreme Court asking for briefs related to either, Steffey said, indicates it has some serious reservations about it passing constitutional muster.

The workers’ comp bill’s successful run through the Capitol to Gov. Haley Barbour’s desk is something Perry Nations has worked, he said, five years to see happen.

“We figured there might be a challenge to it at some point because you’re bypassing a level of the court system,” said Nations, executive director of the Associated General Contractors of Mississippi.

His affinity for the bill, Nations said, is its design that has the potential to save his members time in the court system and money on legal fees, and to ensure a faster reward for an injured employee. He noted that there exists a statute that allows workers’ comp issues to be expedited through the trial court system, but that rarely is true.

“In actuality, probably the average time of the appeal to the courts from the commission is anywhere from one to three years,” Nations said.

That backlog has a multiplier effect down the line.

“Sometimes we run five or six years behind on getting (fiscal) years closed,” Nations said. “We’re still closing some years in the ‘90s waiting on all these cases to settle. This would allow us to settle our books, and we’ll know where we stand quicker. I know it’s a legal decision, but I think it would be a good business decision.”

Ron Aldridge, executive director of the Mississippi National Federation of Businesses, took a more lukewarm approach.

“We watched it (during the legislative session) but we didn’t go out on a limb on it this time,” he said. “In the past we’ve opposed it, but that was prior to seeing some of the statistics (on how many cases were appealed eventually to the MSSC) on it. We were concerned at the time that you would lose the ability to go to a local court on the front end. Once we saw those statistics, and it became clear that the vast majority had their appeals exhausted, it was hard to fight it.”

Law requires any company with five or more employees to carry workers’ comp liability insurance.

“It’s a routine thing,” Aldridge said. “It can be a lot of headache.”

Billy Ware, president of Mid-State Construction in Jackson, said his company has 65 employees, and that what he called “problem cases” arising from workers’ comp are rare.

“That said,relief is never timely,” he said. “It’s a good thing when you can take a level of the court system out of it. This could certainly speed up the process. It’s probably not something I’ll have ton of personal involvement in; but from a business standpoint, it makes a lot of sense.”